It is a high time for you to discover the world's largest and highly liquid market. You would have heard the word ‘Forex' everywhere and you would have wanted to become a part of the market yet how can you become a part of the market without knowing it perfectly well? So, what is Forex market? Are there any successful traders in the market? If you study the Singaporean traders you would understand that they are extremely successful in trading but how? Actually, they have learned the factors which drive the Forex market and they have the ways to trade the market. So, basically, it is all about learning the market.
Before you hop on to the Forex market there are certain facts you should learn and in this article, we will mention a few facts. The most-traded or popular pairs of currencies are EUR/USD, USD/GBP, and USD/JPY. There are few short nicknames as well so you will become familiar with the names when you get acquainted with the market. The minor currency pairs are not traded often and the minor currency pairs include Japanese yen, euro, and sterling as well. You might even come across exotic currency pairs. Anyway, it is just the basic explanation about the market now; let us learn the factors which drive the Forex market.
Interest rates drive Forex market
As you may already know there are many factors which may affect the market so one of such factors is the interest rates. The interest rates play a major role in the moving currencies. Even if it is Forex trading account Singapore or any other trading account the market-driven factors will be the same. As the currencies represent the country's economy the differences in the interest rates will affect the overall currency relations. So, when the interest rates increase the traders tend to invest so the demand for the currency increases. When the interest rates are higher the money becomes expensive. On the contrary, when the interest rate decreases the traders tend to avoid investing because of less return on investment. So, as traders, you should get the proper understanding of the interest rates.
Economic announcements drive Forex market
The next fact is that economic announcements which also drives the Forex market. The economic announcements are such as manufacturing data, unemployment level, GDP figure, and so on. These factors have the greater impact on the country's stability. As for an example, if the unemployment rate is higher the demand for US dollar may reduce so the investors tend to sell the currencies. If you consider Forex prices you should understand that other government's announcement may also affect the currency rate.
Market sentiment drives Forex market
Each and every trader might have an opinion about the market direction but the market sentiment is the factor which shows the majority of the trader's feeling about the market's performance. The traders should make proper decisions by analyzing the technical and fundamental analysis of the market.
Major Price driving catalyst
Majority of the retail traders often ignores the power of fundamental analysis. But just look at the successful trader. Every single one of them is very good in doing the fundamental analysis. Fundamental analysis will help you to measure the strength of the market trend. Since the majority of rookie traders ignores fundamental analysis, the loose money. It’s true that you can find high-quality trading signals by using the technical analysis but who will give you the guarantee that the market trend will not change. Even the long-term existing trend of the market can get change its course due to high impact news release. Some traders will often say that they stay on the sideline during the major news release but the professional traders will always say that this is the best moment to make money. So the choice is yours whether you will follow the footstep of the successful trader or lose money.